A key difference between tariffs and quotas is that
A) consumers are hurt with quotas but not with tariffs.
B) consumers are hurt with tariffs but not with quotas.
C) the government receives revenue with tariffs, but the importer receives the added revenue with quotas.
D) the government receives revenue with quotas, but the importer receives the added revenue with tariffs.

Question

Quizplus · Accepted Answer

Tariffs are taxes on imports imposed by the government, so the revenue generated goes to the government. In contrast, quotas limit the quantity of a good that can be imported, typically administered by the importer who can potentially benefit from the additional revenue generated by limiting the supply. Both tariffs and quotas increase prices for consumers, but tariffs directly generate revenue for the government while quotas indirectly generate revenue for the importer.

A Key Difference Between Tariffs and Quotas Is That